I’ve been getting a bunch of spam in my inbox recently telling me in panicked tones that the world as we know it is on the verge of ending and the only solution is to invest in gold. Touting its great returns, risk hedge capabilities and inflation protection for my portfolio, these missives implore me that if I want to preserve any semblance of wealth after the upcoming apocalypse, I must sell [enter the asset class of your choice here] and put that money to work in gold. Today. Now. Immediately.
Whenever the markets and world affairs are in turmoil—war, plague, political strife, social unrest—the gold-bugs emerge from their cocoons as predictably as cicadas do in the spring and making about as much noise. Maybe more.
It’s tempting. After all, who doesn’t seek some emotional stability and comfort during a crisis? For centuries, people have turned to gold to assuage those feelings. When uncertainty reigns, a certain calm comes from knowing you have something hard, tangible, and glistening in your possession.
For most investors, gold is like a plate of mashed potatoes, gravy and meatloaf. It is comfort food for the portfolio.
Gold as a metal has its merits. It has industrial uses, electronic conductivity and the unique quality of being both hard yet sufficiently malleable to be shaped into lovely objects of art or jewelry. We value gold as a reward for achievement or excellence. The Olympics bestows gold medals to winners, retirees get a gold watch, and we are given pep talks telling us to “go for the gold.”
Great stuff. But what about gold as an investment?
Based on the traditional one troy ounce (“t oz”, 31.1034768 grams) used by the Royal Mint (“owned by Her Majesty’s Treasury”), gold bugs quickly point to the fact that if you had bought that one troy ounce of gold in 1970 and held on to it until now, your total return would be a jaw dropping 5,333% gain! Now compare that to the performance of the S&P Composite*. Those stocks only managed a paltry 3,737% gain over that same period.
By not buying gold, you gave up 1,666% of gains. You fool.
If you break out gold prices over time, you quickly see that the biggest gains in gold came from January 1970 to January 1980, when gold topped out at $760 t oz. Investors in the 1970s were faced with the economic uncertainty of recessions, double digit inflation, and spiking oil prices. Hard assets were the place to be and no asset seemed harder than gold. With a nearly 2,075% total return over that period for an annual growth rate of 36%, gold outpaced a nearly moribund stock market. Over the same time, the S&P Composite eked out only a meager 22.79% return.
It was gold’s golden age. It took 27 years for gold to see that high again.
The price of gold began drifting down after that, hitting a low of around $257/t oz by September 1999. Values didn’t start appreciating in any meaningful way until 2005. (As an interesting aside, gold prices from 2005 to 2011 correlate pretty closely with the increasing use of the internet.) Gold has rallied and fallen since then, pretty much paralleling economic events. For example, from start of the Great Recession in 2007 to shortly thereafter, gold rose from around $810/t oz to a high of $1,794 in September 2011. But as the economy rebounded, gold sank in value, dropping back down to $1,088.90 in November 2015. Sometimes it seems gold values react no better than a Dutch tulip bulb in 1636.
Of course, these days, with the onset of Covid, a rancorous political climate, simmering social unrest, and economic uncertainty, gold again has rallied, hitting a new high of $1,931.90/t oz. in August 2020. Gold’s value seems to grow best when things are (or are perceived to be) at their worst. As an investment, it is the “pessimists play.”
But the gold bugs are quick to come to the defense of their favorite shiny metal. Cherry picking this period or that, they can show it works as an inflation hedge. As for its security, they are quick so tell you there is a reason the world’s central banks keep bars of the stuff in their vaults. (Fun fact brought to you by the U.S. Federal Reserve Bank of St. Louis: a 99.99% pure gold bar is 9.75 inches long, 1.5 inches tall and weighs some 28 lbs./408.3324 t oz.)
The piece de la resistance is that performance number. Yes, yes, gold prices have had their ups and downs, but over the long run, investors in gold were handsomely rewarded by that quadruple percentage return. Isn’t that proof enough gold should be in every long-term investor’s portfolio?
No. There is one fatal flaw in this investment thesis. Let’s revisit gold’s 5,333% return against the S&P Composite’s 3,737% return from 1970 to 2020. Sure, if you just bought the S&P Composite and let it ride for 50 years, the return would underperform against gold.
But that comparison is wrong. The comparison leaves out the eighth wonder of the world—compounding. Add in compounding and now make the comparison. That same investor buying the S&P Composite in 1970 and reinvesting the dividends quarterly would have seen a gain of 68,430% through September 2020.
And that is the problem with gold. Gold pays no dividends. It cannot compound. It does not have economic growth. It does not innovate. It does not generate cash flow. It’s just a piece of inert metal.
Investing in equities means owning a piece of a business. A business is an economic entity creating value and in doing so, grows in value over time. Put those businesses together in an index that reflects the U.S. economy and you have the S&P 500. The S&P composite represents the S&P 500 (the largest capitalized companies in the United States), and other major stock indices. Combined, these encompass every major sector of the U.S. economy.
An investment in the S&P Composite is an investment in the U.S. economy. While the economy may ebb and flow over the years, it tends to grow. In 1970, U.S. Gross Domestic Product (GDP is the market value of the goods and services produced by labor and property located in the United States) was $1,088 billion. By third quarter 2020, U.S. GDP was $21,157 billion.
I’m putting my money on the U.S. economy. I figure if I do well enough, I’ll be able to buy a nice piece of jewelry or a watch. Probably made of gold.
*(Note: We use the S&P Composite here since data on the S&P 500 was not available for the entire time period. While investors cannot invest in the composite directly, they can invest in a mutual fund or ETF that matches the S&P 500 and other components of the S&P Composite.)
Eat Beyond Welcomes Downstream Marketing Strategist Michael Owen to its Investment Committee – Canada NewsWire
Michael Owen brings over 30 years of expertise to provide hands-on support to drive the growth of the Eat Beyond portfolio companies
VANCOUVER, BC, Nov. 26, 2020 /CNW/ – Eat Beyond Global Holdings Inc. (CSE: EATS) (FSE: 988) (“Eat Beyond” or the “Company“), an investment issuer focused on the global plant-based and alternative food sector, is announcing that Michael Owen has joined the Eat Beyond investment committee.
Mr. Owen has over 30 years of experience and is a senior marketing and sales executive. He has held leadership positions in a range of companies focused on consumer packaged goods, with leadership experience in marketing, sales, and supply chain. He spent over 10 years as a partner at Crombie Kennedy, a leading Canadian sales agency, which was acquired by Advantage Solutions in 2010. With Advantage Solutions, Mr. Owen played an instrumental role doubling EBITDA as VP Business Development, responsible for creating innovative sales and supply chain solutions for leading brands across multiple categories during the 5 years post-acquisition.
Prior to this, he held marketing and sales positions with Robin Hood Multifoods Inc., Unilever, Nestle, and Mars Incorporated, where he was CMO of the Uncle Ben’s Rice U.S. division. Previously Mr. Owen has enjoyed entrepreneurial success including ownership of the Duncan Hines brand in Canada and participation in several food company startups. Mr. Owen is also an advisory board member for Nature Bio Foods, India’s largest exporter of organic foods and ingredients.
“Eat Beyond is focused on an area that I consider to be one of the most exciting in the consumer packaged goods, and food space in general. Consumers are seeking healthier, smarter, plant-based, and non-traditional products,” said Michael Owen. “I believe that my extensive operating experience in sales and marketing can add tremendous value and insight to the Eat Beyond portfolio.”
Mr. Owen joins Lloyd Lockhart, Diane Jang, and Allen Linder on the investment committee, rounding out the team with his marketing and sales expertise. The investment committee works to scout and select companies for the Eat Beyond portfolio, and is also hands-on, working closely with the Eat Beyond portfolio companies to support their success.
“We are active in supporting our portfolio companies, helping them to navigate growth and connecting them to industry contacts and resources,” said Patrick Morris, CEO of Eat Beyond. “Mr. Owen is a terrific candidate for the investment committee, with his exceptional track record and breadth of experience in marketing, sales, and growth for consumer packaged goods. We are thrilled to welcome him to the team.”
The Company further announces a grant of 100,000 stock options of the Company to Mr. Owen, exercisable at $0.71 expiring 5 years from the date of grant, subject to regulatory approval.
The Company is also pleased to announce that its common shares were accepted for listing on the Frankfurt Stock Exchange (FSE) under the trading symbol (988). The Company’s common shares are now cross-listed on the Canadian Securities Exchange (CSE) and the FSE.
About Eat Beyond Global Holdings
Eat Beyond Global Holdings Inc. (“Eat Beyond”) (CSE: EATS) (FSE: 988) is an investment issuer that makes it easy to invest in the future of food. Eat Beyond identifies and makes equity investments in global companies that are developing and commercializing innovative food tech as well as plant-based and alternative food products. Led by a team of food industry experts, Eat Beyond is the first issuer of its kind in Canada, providing retail investors with the unique opportunity to participate in the growth of a broad cross-section of opportunities in the alternative food sector, and access companies that are leading the charge toward a smarter, more secure food supply. Learn more: https://eatbeyondglobal.com/
For media inquiries, please contact: [email protected]
For investment inquiries, please contact: [email protected]
SOURCE Eat Beyond Global Holdings Inc.
For further information: please contact Cindy Chiu at [email protected] or (236) 521-6499
Red White & Bloom Announces Participation in Upcoming Investment Conferences – GlobeNewswire
TORONTO, Nov. 25, 2020 (GLOBE NEWSWIRE) — Red White & Bloom Brands Inc. (CSE: RWB and OTC: RWBYF) (“RWB” or the “Company”) is pleased to announce they will be in attendance at two invitational investment conferences this month.
2020 Cantor Fitzgerald Virtual MSO Cannabis Summit
Presentation: Wednesday, December 16th, 2020 – 3:00PM ET
For more information or to schedule a one-on-one meeting with RWB’s management during these events, please contact Red White & Bloom’s Investor Relations at IR@redwhitebloom.com.
About Red White & Bloom Brands Inc.
The Company is positioning itself to be one of the top three multi-state cannabis operators active in the U.S. legal cannabis and hemp sector. RWB is predominantly focusing its investments on the major US markets of Michigan, Illinois, California, Arizona, Oklahoma and Massachusetts with respect to cannabis, and the US and internationally for hemp-based CBD products.
For more information about Red White & Bloom Brands Inc., please contact:
Tyler Troup, Managing Director
Circadian Group IR
Visit us on the web: www.RedWhiteBloom.com
Follow us on social media:
Neither the CSE nor its Regulation Services Provider (as that term is defined in the policies of the CSE) accepts responsibility for the adequacy or accuracy of this release.
FORWARD LOOKING INFORMATION
This press release contains forward-looking statements and information that are based on the beliefs of management and reflect the Company’s current expectations. When used in this press release, the words “estimate”, “project”, “belief”, “anticipate”, “intend”, “expect”, “plan”, “predict”, “may” or “should” and the negative of these words or such variations thereon or comparable terminology are intended to identify forward-looking statements and information. The forward-looking statements and information in this press release includes information relating to the new team members expertise and how the Company will benefit from their ability to assist the Company implement its business plan. Such statements and information reflect the current view of the Company with respect to risks and uncertainties that may cause actual results to differ materially from those contemplated in those forward-looking statements and information.
By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following risks: risks associated with the implementation of the Company’s business plan and matters relating thereto, risks associated with the cannabis industry, competition, regulatory change, the need for additional financing, reliance on key personnel, the potential for conflicts of interest among certain officers or directors, and the volatility of the Company’s common share price and volume. Forward-looking statements are made based on management’s beliefs, estimates and opinions on the date that statements are made, and the Company undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change. Investors are cautioned against attributing undue certainty to forward-looking statements.
There are a number of important factors that could cause the Company’s actual results to differ materially from those indicated or implied by forward-looking statements and information. Such factors include, among others, risks related to the Company’s proposed business, such as failure of the business strategy and government regulation; risks related to the Company’s operations, such as additional financing requirements and access to capital, reliance on key and qualified personnel, insurance, competition, intellectual property and reliable supply chains; risks related to the Company and its business generally. The Company cautions that the foregoing list of material factors is not exhaustive. When relying on the Company’s forward-looking statements and information to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. The Company has assumed a certain progression, which may not be realized. It has also assumed that the material factors referred to in the previous paragraph will not cause such forward-looking statements and information to differ materially from actual results or events. However, the list of these factors is not exhaustive and is subject to change and there can be no assurance that such assumptions will reflect the actual outcome of such items or factors. While the Company may elect to, it does not undertake to update this information at any particular time.
THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS PRESS RELEASE REPRESENTS THE EXPECTATIONS OF THE COMPANY AS OF THE DATE OF THIS PRESS RELEASE AND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH DATE. READERS SHOULD NOT PLACE UNDUE IMPORTANCE ON FORWARD-LOOKING INFORMATION AND SHOULD NOT RELY UPON THIS INFORMATION AS OF ANY OTHER DATE. WHILE THE COMPANY MAY ELECT TO, IT DOES NOT UNDERTAKE TO UPDATE THIS INFORMATION AT ANY PARTICULAR TIME EXCEPT AS REQUIRED IN ACCORDANCE WITH APPLICABLE LAWS.
Feds should invest to meet climate goals, catalyze recovery: RBC – Investment Executive
“Making these investments now could help underpin a low-carbon transition, drawing in business investment, and complementing the government’s efforts to support jobs and economic recovery,” it said.
The government has planned emissions reductions toward the ultimate goal of net-zero emissions by 2050.
Yet, for major polluters, such as the energy sector and heavy industry (such as concrete and steel), carbon capture is technically feasible but “often seen to be cost prohibitive,” RBC noted.
Carbon capture projects “are capital intensive and high-risk during the extended construction phase,” it said, adding that this discourages private investment.
This is where government should be stepping into the breach with public funding for research, RBC suggested. Ultimately, driving down costs and developing effective technology will help the projects become more viable for private investment.
“As it lays out long-term climate plans, the federal government has an opportunity to write a new chapter in Canadian climate policy: one that acknowledges the importance of the energy sector, encourages abatement across industries, leverages investment from the private sector, and spurs innovation in sectors that contribute the most to our climate challenge,” the report said.
At the same time, government investment can help combat the long-lasting effects of the Covid-19 crisis, the report said.
“While crisis support for the economy has rightly been the government’s focus, investment in new technologies and industries can limit lasting scars from this recession,” it said.
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